“Amazon.com Inc.’s escalating pursuit of Apple Inc. squeezed its profit forecast for this quarter, prompting investors to erase as much as $11 billion from the company’s market value,” Danielle Kucera reports for Bloomberg.
“Amazon’s operations could lose $200 million in the fourth quarter as costs mount, the Seattle-based company said yesterday,” Kucera reports. “The shares fell 11 percent to $203.30 at 9:44 a.m. New York time, the biggest intraday drop since July 23, 2010.”
Kucera reports, “Amazon is selling its new Kindle Fire device for as low as $199 — less than half the price of Apple’s cheapest iPad. At that price, the company will lose $10 per device, research firm IHS Inc. estimates.”
MacDailyNews Take: “Less than half the price of Apple’s cheapest iPad.” The reporter should mention that the size of the Kindle Fire’s tiny screen is 45% that of Apple iPad’s, but does she? No.
“Chief Executive Officer Jeff Bezos, Amazon’s founder and largest shareholder, saw his stake lose as much as $2.2 billion in value. He reported holding 88.1 million shares as of Aug. 18,” Kucera reports. “Amazon’s operating results may range from a loss of $200 million to a profit of $250 million this quarter, the company said yesterday. Analysts were projecting a gain of $512.7 million on average, according to Bloomberg data. Sales will be $16.5 billion to $18.7 billion, Amazon said.”
Read more in the full article here.
MacDailyNews Take: Even is a best case scenario, Amazon sure does a lot of work for relatively little profit: $18.7 billion in revenue to generate $250 million in profit. Last quarter, Apple posted revenue of $28.27 billion with a net profit of $6.62 billion.
Amazon as a company, and Jeff Bezos, in particular, are truly, profoundly, evil entities. Amazon treats its customers well, but it treats its employees, suppliers, and outside companies very poorly. It is a dishonest, corrupt organization. It represents the worst caricature of what an evil corporation looks like… but most people don’t realize it because they’re innovative in fulfillment and have generally good prices, and policies towards customers. Bezos is greedy and money grubbing and psychopathically self centered.
Worse than Walmart?
I was thinking it sounded a lot LIKE Wal-mart.
I don’t think anyone can be worse tahn WalMart
“… psychopathically self centered.”
Pot, meet kettle.
AMZN stock has been a head scratcher, with a huge P/E and narrow margins, you have to wonder what investors are thinking to pay so much. Today they’re paying 11% less than they were yesterday
Chief Executive Officer Jeff Bozos, Amazon’s founder and largest shareholder
All of the shit for brains AMZN investors are betting that in the future, book, movie and music publishers are going to ask for a smaller percentage when Amazon has a total monopoly on distribution and squeezes them?
Amazon is 1/3 as profitable as Wallmart – something is surely wrong with their business model as profits do no justify the high P/E and there’s no really a reason to believe Amazon margins are going to improve.
As long as Apple has something to say about it, Amazon won’t have a monopoly on music, movies and books.
I am often baffled as to why the non-tech media (and some tech media) insist on comparing the Kindle Fire to the iPad. The former is a e-Book reader with some additional features. The latter is a full-fledged computer that does a whole lot more. Of course the former is cheaper. But then a Kia is cheaper than Mercedes.
The low profit margins shouldn’t be surprising. At its core, Amazon is nothing more than a retailer, which is a low margin business to begin with. Anyone who invests in them thinking that they’re a high value-added technology company is the proverbial fool for a client.
The question of course, is why are they willing to lose this much money. After all, the $10/device only counts the parts, not other costs such as development, support, advertising…
For a provocative analysis see:
http://jmmxkindlepage.wordpress.com/analysis-kindle-fire/